Disclosure Requirements

Businesses seeking funding on the Equity Portal platform are required to disclose certain information to potential investors, including general information regarding the company and its officers and directors. Furthermore, the business must offer information regarding its plans for the money that it raises and the amount the business is seeking to raise. There must be information regarding the offering’s deadlines, the risks associated with investments in this type of business, and certain financial information of the business.  

The type of financial information that a business must disclose depends on the business’s past raising practices. The figures below detail what financial information a business is required to disclose based on the type and amount of raise: 

  • $124,000 or less – financial statements and certain specific line items from income tax returns are required, both of which must be certified by the company’s principal executive officer.
  • $124,000.01 to $618,000 – an independent public accountant must review the business’s financial statements and provide the report, and a certification by the company’s principal executive officer. A review is some level of scrutiny of the financials by a CPA.
  • $618,000.01 to $5 million – if first time crowdfunding, then financial statements reviewed by an independent public accountant and the accountant’s review report if available must be disclosed: otherwise, financial statements audited by an independent public accountant and the accountant’s audit report must be prepared and disclosed. An audit provides a higher level of scrutiny than a review and some verification by an accountant.

To assist investors in the due diligence process, each business’s website typically offers a discussion forum that allows potential investors to ask questions and receive additional information if necessary.

Large public companies are regulated by much stricter disclosure rules than the private small businesses on the Equity Portal platform. For these private small businesses, further updates will be provided on the company’s website when their offering has closed. It is expected that these updates will be less informative than those provided by public companies to their shareholders. Once you have closed on your investment or the offering has been closed, Equity Portal will no longer be responsible for or offer updates regarding the business.